James Butler, Inc. v. Deegan — 115 N.Y.S. 60

Majority

p. 60

JAMES BUTLER, Inc., v. DEEGAN et al.

(Supreme Court, Appellate Division, First Department.

February 19, 1909.)

Headnote

1. Use and Occupation (§ 3^[1] )—Right of Action.

Where a tenant sells his store business, and the buyers are informed by the landlord that he will not accept them as tenants and they so report to the seller, and he agrees to turn over the store and be liable for rent if they will pay him a certain sum, an assignee of the tenant cannot recover of the buyers for the use and occupation.

[Ed. Note.—For other cases, see Use and Occupation, Dee. Dig. § 3.*]

2. Use and Occupation (§ 3*)—Defenses—Admissibility of Evidence.

Where buyers of the store business of a tenant are sued by the tenant’s assignee on a claim against them for the use and occupation of the premises before the expiration of the lease, and defendants testify that the landlord refused to accept them as tenants, and that on so reporting to the tenant it was agreed that he should turn over the store and that they should include the rent, which he had agreed to pay the landlord, as a part of the purchase money, evidence that they had fully paid the consideration agreed on was improperly excluded.

[Ed. Note.—For other eases, see Use and Occupation, Dec. Dig. § 3.*]

Appeal from Trial Term, New York County.

Action by James Butler, Incorporated, against Edward Deegan and another. From a judgment for plaintiff entered on a directed verdict, defendants appeal. Reversed.

Argued before INGRAHAM, LAUGHLIN, CLARKE, McLAUGHLIN, and SCOTT, JJ.

Magner & Carew, for appellants.

John H. Rogan, for respondent.

The. complaint alleges that one James Butler had a lease from the 15th of March, 1906, to the 15th of March, 1907, of a portion of a building, a store, in which he was carrying on business; that the defendants occupied the premises by permission of Butler as his tenant from the 1st of April, 1906, to the 15th of March, 1907; that the use of said premises was reasonably worth $862.50, no part of which had been paid by the defendants, though payment had been'demanded and refused; that on the 23d of June, 1907, and prior to the commencement of this action, Butler, for a valuable consideration, assigned his claim to the plaintiff, and judgment was demanded for that sum, with interest. The answer denied the material allegations of the complaint, and specifically denied that there was due the plaintiff the sum of $862.50, or any sum whatever.

At the trial it appeared from the testimony on the part of the plaintiff that on the 1st of April, 1906, Butler sold to the defendants his business, and the defendants thereafter continued in possession of the store during the time for which a recovery was sought; that the rental value of the premises during that time was $75 a month; that Butler’s claim was assigned to th‘e plaintiff, and defendants had not paid anything for the use and occupation. From the defendant’s testimony it appeared that immediately prior to the purchase of the busi

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ness of Butler the defendants had a conversation with the landlord, and he would not accept them as tenants in place of Butler. They so reported to Butler and he thereupon said, if they would pay him $1,-043, he would turn over the store and would be liable for and pay the rent himself. This evidence was in no respect contradicted by the plaintiff. It therefore stands admitted so far as the record shows that the real transaction was as claimed by the defendants^ and, if so, then the plaintiff could not recover for the use and occupation.

Various attempts were made to show that the full consideration of $1,043 had been paid prior to the commencement of the action. All of this evidence was excluded, apparently upon the theory that the defendants had not pleaded payment of rent in their answer. The contention was that the relation of landlord and tenant never existed; and it did not if the defendants’ testimony were true. The defendants ascertained before they purchased the business carried on by Butler on the premises that the landlord would not accept them as tenants, but that he should continue to hold Butler as a tenant and they so reported to the latter, and thereupon, according to their testimony, it was arranged that the defendants should include the rent as a part of the purchase money for the store which he agreed to pay to the landlord. If it be true that this was the real transaction, then it is obvious they had a right to show they had fully paid the consideration agreed upon. The evidence showing this payment was improperly excluded, and the court erred in directing a verdict.

The judgment appealed from, therefore, is reversed and a new trial ordered, with costs to appellants to abide event. All concur.